Dow Rebounds With Strengthening Global Markets

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Blue chips ended modestly higher Tuesday as U.S. retail sales rose for a fourth straight month in July, further showing evidence of a slow but steady economic recovery. In fact, markets were bullish in much of the world today, as European shares gained value on German investor confidence. Asian shares were also up broadly, on better-than-expected Japanese machinery orders and an easing of real estate restrictions in China. The worldwide optimism was too much for Wall Street to ignore, and the Dow Jones Industrial Average (DJINDICES: ^DJI) added 31 points, or 0.2%, to end at 15,451.

Hewlett-Packard (NYSE: HPQ) led all Dow gainers, jumping 2.1% after a choir of analysts sung HP's praises. Citigroup added the tech mainstay to the bank's U.S. Focus List, insinuating expectations were too low for the earnings call next Wednesday. Meanwhile, Morgan Stanley said the turnaround project was moving in the right direction with its focus on enterprise business. Bank analyst Dick Bove also chimed in, saying he thinks the stock is poised to double from current levels.

Boeing (NYSE: BA) shares also stood out today, tacking on 1.9% as the head of Spirit AeroSystems, one of Boeing's component part manufacturers, said the aerospace giant could boost output by 12% by year's end. Obviously, that sort of confidence is worth more coming from the mouth of Boeing executives themselves. That said, the proof is in the pudding: Boeing delivered the first of 30 737s to Iraqi Airways today, starting to fulfill an order placed in 2008 and encouraging shareholders in the process.

Alas, even when the bulls are running on Wall Street, a few stocks always get trampled. Alcoa (NYSE: AA) , for instance, lost 1.3% Tuesday. Long-term investors bullish on aluminum -- Alcoa's core business -- should ignore today's small swing, which came on a day with little to no material developments in Alcoa's business. Despite Alcoa's ignominious claim to being the Dow's most heavily shorted stock at the end of July, that may be due to speculative bets that the Fed will start tapering soon. However, even if those bets are on point, Alcoa's business is by no means doomed.

Lastly, Microsoft (NASDAQ: MSFT) shares had nothing going for them today, shedding 2% after a class action lawsuit was filed on behalf of investors claiming the company concealed weak Surface RT sales from full public disclosure. Adding insult to industry, a Stifel Nicolaus analyst cut shares from a buy to a hold rating today, arguing that Microsoft will have to both cut the price of its cash-cow Windows product and start shelling out more dough to achieve its lofty goals.

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